Initial Financing of Croatian SMEs: Financial Reports Evidence

Roberta Kontosic Pamic and Adriana Galant
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Roberta Kontosic Pamic: Juraj Dobrila University of Pula, Croatia
Adriana Galant: Juraj Dobrila University of Pula, Croatia

Managing Global Transitions, 2020, vol. 18, issue 4 (Winter), 265-283

Abstract: When starting a business, one of the major decisions that need to be made is how such business will be financed. Entrepreneur can consider different possibilities, the most commonly used sources of financing include own resources of entrepreneur(s) and combination of own resource and borrowed resources. Due to legal requirements, in Croatia it is theoretically impossible to start a company without own resources, although it is possible to start a company with symbolical amount of own resources. For a new company it could be hard to lend money from financial institutions due to the lack of business experience and asset, which could serve as collateral. Considering different available ways of financing new business, the aim of this paper is to analyse how new established Croatian SMEs are financed. The conducted research has shown that new entrepreneurs are using more borrowed resources to finance their asset compared to own resources.

Keywords: entrepreneurship; financing; financial reports; SMEs; Croatia (search for similar items in EconPapers)
JEL-codes: L26 M41 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.26493/1854-6935.18.265-283

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